A report out late Sunday night by the Wall Street Journal may have investors worried today. The paper says that Apple has cut component orders for the iPhone 5 in half due to weak demand, citing “people familiar with the situation.” The WSJ says that orders for the iPhone 5’s screen for the January-March quarter were reduced by 50% of the original order Apple had placed with suppliers. The paper says that the iPhone screen orders were not the only components cut either. Component suppliers were reportedly made aware of the cuts last month.
Do the component cuts, if true, mean iPhone 5 demand is weak? It’s possible. But it could also hint at another number of things. Apple usually cuts component orders down when they are getting ready to ramp up for a new product. There have been rumors that Apple will move to a six-month release schedule for its iOS devices to keep up with competition. The lower component orders could signal that an “iPhone 5S” can be expected sooner rather than later. Also, component cuts could mean Apple has only reduced orders from specific companies and has replaced them with new vendors to better hedge against manufacturing delays.
Whatever the case, this news may just have investors — and the stock — depressed until Apple officially responds to it during its next financial conference call on January 23rd.
WSJ: Apple cuts iPhone 5 parts order due to weak demand originally appeared on TUAW – The Unofficial Apple Weblog on Mon, 14 Jan 2013 09:30:00 EST. Please see our terms for use of feeds.